Treasuries were slightly stronger in the overnight session with 10yr yields falling just over a bp.  They've moved another 2-3bps lower as the morning progressed with most of the movement seen between data releases (as opposed to the few minutes immediately following them--a clearer sign of causality).

That's not to say that the data hasn't helped bond market positivity.  With both the Empire State Manufacturing data and the NAHB Housing Market Index in weaker shape, there's certainly an argument to be made for that.  It's just that bond markets lost ground with the former--sort of a paradox unless you focus specifically on the resilient Employment component of the data.

Causality is a hard case to make with the NAHB data as well, considering that equities markets moved into stronger territory following the release.  If weaker data was fueling bond market positivity, we'd expect it to detract from equities, in general.

Beyond the data, there are two notable takeaways from this morning.  First, the February trend toward higher Treasury yields is definitely waning.  What had been a straight line pointing gently higher is now looking like a more curved "leveling-off."  Things don't look as great for MBS, which have been underperforming so far today (and last week as well).  Fannie 4.0s are only up 4 ticks vs 10yr Treasury prices up 12 ticks.